The Central Bank of Nigeria (CBN) has so far injected $15.9 billion in a period of nine months to stabilise the foreign exchange (forex) market via weekly interventions, according to Mr. Ayodeji Ebo, Managing Director, Afrinvest Securities Limited.
Ebo said at a Forum organised by the Finance Correspondents Association of Nigeria (FICAN) on the theme: ‘Nigeria’s Economy and Financial Market Outlook: 2017 Review and 2018 Outlook’ Lagos that the intervention funds started in April and ended December last year. He said the figure was an improvement compared to the $9.6 billion spent in during the same period of 2016.
The Afrinvest chief also said the Investors’ & Exporters’ Forex Window has recorded over $27.8 billion in turnover and brought about transparency and stability in the market.
He added that current account stabilised in surplus position, expanding to $9.6 billion annualised in nine months, from $2.7 billion in fiscal year 2016.
Speaking on loans to small and medium enterprises, he said delay and outright non-payment of borrowed funds by SMEs is making it difficult for key lenders within the sector, including Bank of Industry to grant further credits to operators.
He said it is only when loans are repaid on timely basis that the lender has more capacity to lend to their borrowers.
He said that inflation rate is still higher than Monetary Policy Rate (MPR), which makes it easier for investors to go for fixed income securities like Treasury Bills, Bonds and other instruments that help investors create lasting wealth.
Ebo said 2018 remains an opportunity for investors to make money in both equities and fixed income securities, but advised investors to time their entry and exit accurately in order not to lose their funds.
According to him, there is strong correlation between oil price rise and equities performance, adding that investors always look out for profitable businesses and those with great prospects.
Speaking on the stability in the forex market, he said rate convergence has already been achieved by the CBN, adding that with low exchange rate margin, speculators have virtually abandoned the market.
“Foreign investors also consider the margin between both official and parallel market level. When there is little or no volatility in the market that gives foreign investors’ confidence. The naira gained 35 per cent year-on-year against the dollar to close at N363 to dollar by year-end in the parallel market,” he said.
He said the Economic Recovery and Growth Plan (ERGP) of the Federal Government was built on five pillars, stabilise the micro-economic environment, achieve agriculture and food security, improve transportation infrastructure, ensure energy sufficiency in power and petroleum products and drive industrialisation, focusing on small and medium enterprises.